Survey of Consumers Responsiveness to Small-Scale Producers Marketing in the Northern Hungary Region

The purpose of our study is to survey the marketing issues of small-scale food production and short supply chains (SSCs) from the consumers’ aspects, and to give insight into the effectiveness and potential of SSC marketing. The paper presents the result of a wide online consumer survey with the participation of more than 1000 consumers, mostly from the Northern Hungary region. According to our experiences, the most effective „marketing instrument” was the personal contact with producers, communication with relatives, and acquaintances. One-third part of our sample could be motivated by (this kind of) marketing and had more willingness to pay for small-producers’ goods.


INTRODUCTION
Nowadays, the various problems arising from global trade have become well known. The largest market shares are held by great retail chains selling mass products. In this way, the trade of global products is gradually eliminating the national -local -element from production (Bylok 2014), and this may affect the local trade of consumer goods and services negatively (Kacz et al. 2017). In some special cases, this global-local opposition has been echoed by the media and triggered community engagement for local products (Hoffmann et al. 2016). On the other hand, in Hungary, for example, most vegetable and fruit growers still produce on their own, in an unorganized manner; therefore, their trade is exposed, the degree of integration is weak (Horváth 2010).
For this reason, small producers who cannot benefit from economies of scale may be forced out of the mass market. Participation in short supply chains (SSCs) is an alternative trade channel for them (Kiss 2017). The SSCs are a supported EU priority in the current budgetary period between 2014 and 2020. According to the Regulation (EU) No 807/2014, from the viewpoint of subsidy policy, those trade channels can be considered a "short supply chains," in which the trades between consumers and producers happen directly or at most by one intermediate actor.
In the past decade, numerous literature sources debated on the roles of short food chains in the agricultural sector and their impact on rural development or small agricultural businesses (Dunay et al. 2018). Although SSCs have increasing popularity amongst consumers, their role in the European food system is considered marginal (Augere-Granier 2016).
In the current (2014-2020) budgetary period, the European Union allocates subsidies to wards the short supply chains, by supporting the market entry of small producers and the use of marketing tools. Therefore, we felt it necessary to assess the utilization of marketing activities from the consumer's side.

LITERATURE REVIEW
According to our experiences from Hungary, the numbers of small producers are decreasing, and as a result of our empirical research, many of them are complaining about the customer "snatching" effect of great chainstores. In the current article, we explore the benefits and opportunities of smallholders' marketing activities.
Regarding product quality, according to Lehota et al. (2018), "products diagnostics" for food consumers and food buyers are based on product characteristics, which can be approached in three groups:  experiential products properties (taste, colour, shape, fragrance, etc.)  product properties based on information search (composition, nutrients and their effects)  confidential product characteristics (food safety and technological characteristics).
The positive presence of these aspects also has marketing value.
In most case studies on SSCs, it can be observed that customers prefer producers' goods (for example in producer markets) because they perceive producers' goods to be of high quality (Benedek & Balázs 2014). More studies on SSCs highlight aspects of freshness and "healthy eating" generally and especially in the trade of fruits and vegetables (e.g., Bakos 2017/a, Bimbo et al. 2015, Kahin et al. 2017, Kawecka & Gebarowski 2015, Tanasa 2014. In the study of Campbell et al. (2014), consumers perceive local products as having higher quality and higher value than similar non-local foods. Local products can also be connected to consumers from a cognitive or emotional point of view. These perceptual processes and emotional relations can influence consumers' willingness to buy.
For this reason, quality can also have high marketing value. According to Mancini et al. (2018, 19. p.) who examined the trade of cheese specialties in short food supply chains "product quality is the biggest attraction factor bringing consumers into the outlet." However, in the case of premium-quality or premium price goods, the number of customers who are able and willing to pay higher prices for producers' goods is very limited. Naturally, there are different consumer prices within the certain SSC-channels, depending on the type and geographical location of the given SSCs. For example, one of the main critiques of producers' markets is the high consumer price (Bendek & Balázs 2014). However, depending on the type of the SSC channel, premium prices are not regular. For example, Bakos (2017/b) examining shopping communities, bring forth that such purchases can be made at relatively low, producers' prices.
The results of the case studies on the willingness to pay for local products we know are very different in time and space. It makes the examination of this issue also difficult that definition of "local products" is unclear (Campbell et al. 2014), and it is possible, that different case studies have different approaches. In the study of Dogi et al. (2014), two-third part of respondents was willing to pay a surplus for handicraft products in value of 10-25%, compared to conventional (non-local) foods. In contrast, previous research from the United States reported that majority of respondents would prefer local products with only the same prices. According to this study of Brown (2003) only 6% of consumers would pay a premium of more than 10% for local products. According to Carpio and Isengildina-Massa (2009) consumers in South Carolina were willing to pay an average premium of about 27% for local products and 23% for animal products, compared to out-of-state (South Carolina) products. According to Eastwood et al. (1987;in Carpio & Isengildina-Massa 2009 p. 423)consumers (at the time of that research), had not given preference for local products sold in Tennessee. According to the survey of Carpio and Isengildina-Massa (2009), it was found that this percentage (mentioned above) was higher among respondents who attributed higher quality to local products (than those coming from outside the Member State). Therefore, campaigns that highlight the quality aspects of local (South Carolina) products can be profitable. The willingness to pay for local products was influenced by age, gender, income level, the perceived product quality, the desire to support the local economy and producers markets, and the commitment to agriculture. (Willingness to pay increased with age and income levels, and women were more receptive to animal products.) The authors called "primary motivation" the importance of supporting the local economy and local producers (which influenced more than price and quality in this case). However, many consumers could not identify local (South Carolina) products.
According to Benedek and Takács-György (2013) demographic factors, such as social status, marital status, gender and qualifications can, or their phase of life (their role in life) can be determining. According to their research results, the female members (in relationship, with children and high qualifications) of the elder generation group are significantly more environment-conscious and prefer the local food than those with other demographic features.
In addition to customer decisions and price levels, consumer preferences also play important roles in customers' decisions. There are consumer groups that are unwilling to buy non-local products (Berg & Preston 2017), although their numbers are presumably low. However, there are consumers who are willing to buy local food instead non-local but only in the cases of reasonable prices.
In the exploring study of Kiss (2017), according to the respondent producers, proper marketing and product promotion would be the most necessary to improve producer sales; in other words, the values of producer goods should be communicated to consumers. This pronouncing is connected to the current aim of the EU subsidy policy (between 2014 and 2020), which would help the small producers to reach markets by short supply chains and marketing activities. (The related priority is reported in the "3A Focus Area Summary -ENRD, 2016.) In our experience in Hungary, just a very few SSC producers pay attention (and money) consciously to marketing and advertising activities. The reason of this may be that they spend the majority of their time on production and sales, and they do not trust the return on marketing expenses.
Consumers and local products can possibly be brought together by focusing marketing campaigns, or through, for example, holding events (e.g. all local food week), or sitebased education. These programs can ultimately increase the interested consumers' willingness to pay. Emotionoriented marketing strategies can also help consumers' involvement. (Campbell et al. 2014). There are good opportunities in the related branding and promotion campaigns; if producers can distinguish the products properly and in this way, consumers can distinguish the local products (Carpio & Isengildina-Massa 2009).
According to Fehér (2007), producers need to find the reason why consumers prefer them, for example, to a hypermarket or any other commercial channels. Besides, the shopping experience can be decisive in attracting customers. According to Szabó and Juhász (2012), one of the characteristic features of producers' markets in developed countries is that they also provide experiences for their customers, for example through programs introducing producers and products. During these programs, consumers meet with producers and learn about the uses of products. According to the cited authors, there is a demand from customers for this. Cooking shows or seasonal recipes with associated shopping lists can serve this purpose.
According to Szabó and Juhász (2012), who examined market sales in Hungary, the majority of market leaders did not use almost any marketing tool for advertising the wares or informing customers. On the consumers' side, 61 percent of the respondents had no information about the offers of the markets. The most common marketing "channels" were the signposting and getting information from relatives and acquaintances, but only a smaller part of the respondents noted them.
Bakos (2017/a) draws attention to the importance of marketing activities on local food. Her survey from Hungary shows that young people did not prefer local food; therefore, the various "product-popularizing" and awareness-raising activities can be very important in their case.
In contrast, behaviour and consumption of older generations and females may be different. Femalesbecause of their particular social roles (motherhood, taking care) may be more altruist and hence may be more environmentally conscious and prefer local food which is intensified in their realized behaviour as age advances (Benedek, 2012).

RESEARCH METHODOLOGY
The purpose of our research is to gain insight into the effectiveness and potential of SSC marketing through our wide-ranged, online, consumers' survey made in the Northern Hungary region. While the subsidy policy intends to help smallholders' sales through short supply chains and marketing, we consider it essential to assess the utilisation and success of those marketing activities. At this point, we emphasize one of the limitations of our research, that it is very difficult to measure the success of marketing activities objectively; many factors can influence it (Chrysochou 2017).
The sampling period lasted from October 2018 to June 2019. The survey included 1034 respondents with valuable answers. (We considered incomplete fillings as missing valuation; for one or two, we did not exclude the respondents yet. Only two cases were excluded for obviously unreliable or defective filling.) The target area of the research was the North Hungary region; accordingly, 86% of the respondents lived in Heves, Nógrád or Borsod-Abaúj-Zemplén counties. The remaining participants came primarily from settlements that are close to the borders of these counties, or from Pest county or Budapest. The questionnaire was spread online by direct email inquiries and with the use of social media.
The group of women (69%), younger people under 35 years (49%), and participants with college and university degrees (50%) were overrepresented compared to the national average. (This is not a surprising fact, as the last two segments may point to the regular internet user groups of the population.) Regarding marital status, the majority of respondents were married (41%) or lived with partner (in common-law marriage). The number of persons living in their households was evenly distributed: 2 persons: 26,7%; 3 persons: 26,6%; 4 persons: 25,1%; 5 persons: 9,6%. The age of the sample was averagely 37,8 years. (with 13,43 standard deviation).
The questionnaires were collected using Google form. The results were processed and evaluated by Microsoft Excel and IBM SPSS statistical software. Descriptive statistics, factor analysis, cluster analysis were used to present the results, and Chi-square tests and analysis of variance (ANOVA) were performed to examine possible correlations at a 5% level of significance.

RESEARCH RESULTS
The results of our survey support the tendency presented by Augere-Granier (2016), that producers' sales played only a minor role in the purchases of consumers. One-third part of our respondents purchases from local producers up to maximum of EUR 16 (HUF 5000) in an average month. Another third bought between EUR 16 and 31 (HUF 5001-10000); more demand is generated only by the remaining part of the customers. The three most popular consumers' product-categories were honey, eggs, and fruits-and-vegetables.
In our survey, nearly half of the respondents felt it a problem, that they did not have sufficient information on the supply of local producers. This is related to the results of Szabó and Juhász (2012) that points to the lack of marketing activities. Lack of information can, of course, prevent or discourage consumers from buying. However, increasing marketing does not guarantee revenue growth in itself. "Efficiency" of the certain small producers' marketing channels is very different.
Newspaper advertisements, television and radio advertisements, leaflets, posters, promotional gifts proved to be the least effective. We refer to these as "conventional" and "non-personal marketing channels" throughout the study. The most effective marketing channels were those that based on personal relationships, namely, getting information from relatives and acquaintances (in connection with the results of Szabó and Juhász 2012) and the personal contact with the producers themselves. These influenced the customers' decisions the most. In terms of efficiency and popularity, the role of the internet and social media is worthy of mention, and it is increasing nowadays.
The following and main purpose of our study was to identify the customer group that is most responsive to small-scale marketing and to determine their characteristics. Since the eight different marketing channels presented in Figure 1 are difficult to handle together, we reduced their numbers (as "variables,") by factor analysis. We created two factors based on the existence, perception, and influence of the certain marketing channels. (The eight marketing channels could be perfectly separated into two factors, with the help of factor analysis. For a criteria test, we counted the Kaiser-Meyer-Olkin (KMO) index, which value was 0,794. This means that the variables in the sample are very suitable for grouping by factor analysis (Sajtos & Mitev 2007)). Influence the buying decision The first factor was named "Non-Personal Marketing Channels," and as the result of the analysis, it contains the following channels:  television and radio advertisement  poster-, and table (signboard) advertisements,  newspaper-advertisements  gifts, promotional products  leaflets, name-cards  internet, social media

Source: own editing
To the second factor, we gave the name of "Marketing channels based on personal relationship," and it includes the following two types:  information from relatives and acquaintances  personal contacts with the producers.
It can be seen from Figure 1 that factor analysis separated the marketing channels based on the "effective" and "less effective" channels. After creating the two factors, we examined how customers relate to these factors. We performed a cluster analysis with the IBM SPSS statistical software (using Ward method) to identify consumer groups that behave similarly regarding marketing channels and to characterise them by their identifiable attributes. Based on the result, we decided to form four clusters or consumer groups, with the following names:  Cluster 1: Consumers who are more open to wide (mass) marketing channels (number of members: n=95). This small group was significantly more influenced than other clusters by television, radio, flyer, and promotional advertising, but was only moderately motivated by personal contacts.
 Cluster 2: Consumers who are opened primarily for marketing channels based on personal relationships, but also open to others (n=132).  Cluster 3: Consumers who are not or only marginally opened for small-scale marketing (n=581)  Cluster 4: Consumers who are opened only to personal relationship marketing channels (n= 226) (Figure 2). We wanted to find those criteria that distinguish these consumer clusters from each other. If relevant differences are discovered, targeted marketing activities may be made with the identified groups. By exploring their attitudes, marketing positioning becomes possible. Surprisingly, there were no statistically significant differences in their demographic features (such as gender, age, marital status, number of households, or self-reported financial status). Education-level is an expectation, where in the case the first cluster (people who are more open to wide (mass) marketing channels (n=95)) the proportion of "schoolleaving certificate" and "technikum -i.e. vocational school" was higher than college or university qualification (as a highest educational level). In the other three groups, proportion of college or university qualification was the highest. It is a possible conclusion that consumers with higher education levels use newspapers, television, radio, posters, leaflets (as media) less. On the other hand, use of internet and social media was relatively high, except in cluster 3 (who were not responsive to marketing), and were less important in the case of cluster 4 (for those who prefer personal contacts).
Legend of consumer groups (clusters): Cluster 1: Consumers who are more open to wide (mass) marketing channels (number of members: n=95), Cluster 2: Consumers who are opened primarily for marketing channels based on personal relationships, but also open to others (n=132), Cluster 3: Consumers who are not or only marginally opened for smallscale marketing (n=581), Cluster 4: Consumers who are opened only to personal relationship marketing channels (n= 226).
Source: own survey The increase in factor values on the x and y axes indicates the receptivity to and awareness of them.
In this way, we were not able to identify the demographic characteristics of consumers who are responsive to small-scale marketing. The results from case studies examining SSC-user consumers (e.g. Carpio & Isengildina-Massa 2009) may offer a basis for marketing strategies aiming certain consumer groups. The authors mentioned above experienced that willingness to pay may increase with age and income level, and women were more susceptive for certain products.

RELATIONSHIP BETWEEN WILLINGNESS TO PAY AND RESPONSIVENESS TO MARKETING
Statistically, significant differences could be measured between the four consumer clusters and monthly expenditures on producers' goods and the willingness to pay (Table 1, Table 2).
While clusters 1 and 3 mostly spent less than 5000 HUF (16 EUR), in the cases of cluster 2 and 4 spending between 5000 and 10 000 HUF (16-31 EUR) were determinant, and the ratio of spending more than 10 000 HUF (31 EUR) was also higher. Distribution of willingness to pay was similar to that of monthly expenses (Table 2.) It can be pronounced that clusters 2 and 4 mean the most solvent demand for producers' goods (together they make up about one-third part of the sample). From marketing point of view, their purchasing habits were significantly influenced by personal relationships, contacts with the producers and information by relatives and acquaintances. We conclude that, in this way, these personal relationships have a strong relation with consumers' willingness to pay. Thus, the phenomenon described in the literature (Carpio & Isengildina-Massa 2009) that consumers' may be intended to support local producers. It also related to sense of community. The willingness to pay of clusters 1 and 3 approaches the average value from below. In the case of Group 1, the influence of traditional (mass) media did not lead to a higher willingness to pay. The average, 20,7% surplus as willingness to pay fits in with the results of the case studies presented in the "Research background" section.  We asked our respondents to rate each store-types and sales channels to determine how important they to their food purchases. Markets and producers' markets (as producers' sales channels) were mostly preferred by members of cluster 2 and 4. (On the other hand, very few people attached importance to buying at the producers' places, or home delivery; regardless of the clusters).
In the next session of our survey, we examined how the members of certain clusters chose products. Productpreferences were assessed by 11 characteristics, and they were grouped to the following three factors:  Factor 1.: -Product quality and food safety aspects: product quality; being organic product; Hungarian (domestic) origin, environmental awareness, uniqueness, brand, and manufacturer  Factor 2.: -Influence of personal relationships and advertisements: family traditions; personal contacts and emotional attachment; influence of advertisements  Factor 3.: -Influence of prices: price; special offers (Table 3.) For clusters 2 and 4 (which indicates the highest demand for small producers wares), quality and food safety aspects were the most important. Compared to cluster 3 (less responsive to small-scale goods), personal relationships and emotional attachments were important.
Although price, as a factor, influenced the food buying habits of all clusters, it can be observed that clusters 2 and 4 were the least price-sensitive (with small differences). The consumers from cluster 3 were least interested in quality, and their price sensitivity was almost the highest in the sample. Emotional relationships were the least influencing in their case.

PERCEIVED QUALITY PARAMETERS OF SMALL PRODUCERS' GOODS ACCORDING TO THE RESPONDENTS' CLUSTERS
In general, all groups agreed that producers' goods were characterised by freshness, naturalness, and good taste. Concerning purchasing decisions, also the clusters 2 and 4 were the most responsive to these aspects. Opinions about the constant quality, cleanness, and (inner) composition were more divided, but more than half part of members from clusters 2 and 4 was positively influenced by them. Right looks as perceived positive quality has shared these two clusters too, but nearly half of their members found that these wares have good looks, and it was influencing for nearly 40% of them. These listed, perceived quality parameters were well suited to fit into a single factor (value of KMO index: 0,833). The resulting factor values are in the range of -1,9 to 1,47. The higher the factor value, the better the respondents perceived the quality aspects, and the more they were influenced in their purchases by them. (Table 4.)  Form the perceived quality parameters approach; it appears that the second and then the fourth cluster mostly considered the small producers' wares to be of high quality. The result is consisted with the findings of Carpio and Isengildina Massa (2009) that perceptions of higher quality [respectively the demand and responsiveness on them] are associated with higher willingness to pay.

CONCLUSIONS
In our survey, we sought to assess the need for smallproducers' marketing and its effectiveness. The examination is based on a consumer survey of more than thousand respondents, mainly from the Northern Hungary region. Not a surprising result, that local products and short supply chains play only a complementary role in the modern food trade.
On the one hand, the importance of the issue is based on that the European Union supports short supply chains in the budgetary period between 2014 and 2020. On the other hand, nearly half part of our respondents mentioned that there is a lack of information about small producers' wares, and this causes difficulties during purchasing.
Four consumer groups were identified based on their responsiveness to small-scale marketing channels. The greatest cluster (with 581 members) consisted of consumers who typically had the lowest demand for small producers' goods. A smaller cluster of 95 respondents was attracted by traditional marketing channels based on mass communications (television, radio, advertisements and so on), but this group only slightly exceeded the demand and willingness to pay of the previous cluster. The remaining two clusters meant the greatest demand for small-scale goods, with a total of 358 consumers. Most of these consumers (226 people) were hardly interested in traditional, wide, mass-media marketing (television, radio, newspaper advertisement, flyers, posters, promotional products). Even internet had only lesser importance in their cases. For them, the most important marketing channel was personal contacts with producers and acquaintances. At product selection, they were the most interested in product quality attitudes, such as freshness, origin, or (inner) content. Many respondents ascribed good quality attributes to small producers' goods, but these groups were most influenced regarding purchasing habits.
In marketing, we highlight two important facts: personal relationships and product quality. According to our findings, these are what attract customers the most. Consumers are receptive to these, accounted for one-third part of the sample according to our methodology. Widespread "classic" advertising methods (TV, radio, flyers, posters) were not considered effective tools. Internet and social media reached and influenced a relatively lot of people.
We agree with the suggestions of the literature regarding marketing campaigns focusing on the quality aspects of products or holding public events (maybe in the farmsteads). These events could be, for example, cooking shows or product exhibitions, handicraft programs, or demonstrating production and production method itself (even by visiting the farmstead). (The role of shopping experience is not to be underestimated.) It should be noted that in many cases, shopping could happen on an emotional basis; therefore, we see opportunities in any programs or campaigns that promote producer-consumer relationships and trust.
We want to draw attention to an important limitation of our research: greater willingness to pay is not merely a consequence of marketing activity. It may be related to consumer preferences that are not covered in our study. A previous commitment to producer goods can trigger or result in responsiveness to small producers' marketing.